Not looking good as more and more investors are pulling the plug. This will effectively reduce liquidity and increase volatility. If this trends holds (which there is no reason to believe otherwise) markets will continue the wild intra-day swings. Mutual fund companies are still a short from this perspective.

Sausalito, CA February 26, 2009 TrimTabs Investment Research estimates that all equity mutual funds posted an outflow of $22.7 billion in the week ended Wednesday, February 25, versus a revised outflow of $977 million in the previous week.

Equity funds that invest primarily in U.S. stocks posted an outflow of $18.2 billion, versus a revised inflow of $365 million in the previous week. Equity funds that invest primarily in non-U.S. stocks had an outflow of $4.6 billion, versus a revised outflow of $1.3 billion in the previous week. In addition, bond funds had an outflow of $2.1 billion, versus a revised inflow of $4.4 billion in the previous week, and hybrid funds had an outflow of $864 million, versus a revised outflow of $366 million in the previous week.

Separately, TrimTabs reports that exchange-traded funds (ETFs) that invest in U.S. stocks posted an outflow of $739 million, versus an outflow of $6.9 billion, in the previous week. ETFs that invest in non-U.S. stocks had an outflow of $540 million, versus an outflow of $203 million in the previous week.

TrimTabs Investment Research is the only independent research service that publishes detailed daily coverage of U.S. stock market liquidity–including mutual fund flows and exchange-traded fund flows–as well as weekly withheld income and employment tax collections. Founded by Charles Biderman, TrimTabs has provided trading strategies to institutional investors since 1990. For more information, please visit www.TrimTabs.com.